In this presentation, Mark Douglas explains the dynamics of the trader’s “mindset” at a very fundamental level. You will gain a comprehensive understanding of how you must first learn to think like a trader before you can fully utilize your technical or analytical abilities.
You must not only understand certain basic trading principles, but also keep that understanding at a functional level in your mental environment. In order to trade successfully, these principles of trading must become part of the core of your personal psychological makeup.
The very nature of trading confronts us with contradictions and paradoxes which make it difficult to grasp the necessary mindset for consistent success. Many traders assume, “If I can find the right trading system or learn enough about the markets’ behavior, the mental part of trading (lack of confidence, discipline or focus) takes care of itself.” This may appear logical but, in fact, could not be further from the truth.
Better analysis can’t compensate for the kind of errors, losses, missed opportunities or money left on the table which result from too little confidence, discipline or focus, because the markets present us with too many variables. More often than not, more analysis only makes these problems worse.
The most successful traders have attained a “trader’s mindset” — a unique set of attitudes which allows them to transcend the typical errors and fears that plague everyone else. In this workshop, Mark elaborates on these attitudes. He draws upon his vast experience to explore with you the qualities and characteristics of a unique market mindset — an absolute prerequisite to producing consistent results as a trader.
PDF Workbook
Mark Douglas is president of Trading Behavior Dynamics, Inc., a Chicago-based consulting firm that helps traders around the world (individuals, CTAs, and brokerage firms) master the psychological discipline necessary to trade successfully. Mark leads seminars, counsels individual traders, and consults with financial trading organizations. He is a frequent speaker for TAG in Europe and the Far East as well as the annual TAG conference in the United States. Mark’s first book, the critically acclaimed bestseller, The Disciplined Trader, is based upon his personal trading experiences. It is hailed as the most provocative and stimulating work on trading psychology published in the last decade..
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SOCIAL PRESSURE
Social pressure can also tax your limited psychological resources. At its worst, we may continually feel that someone is watching us. Our family, friends, or spouse may expect us to make profits. It’s natural to care what they think, but caring too much can gnaw at us. The social pressure to perform can upset us so much that we make trading errors, or hold on to losing trades to avoid having to admit that we have been mounting losses. If you feel social pressure, you may get into the habit of keeping how you are doing to yourself. But if you must tell close friends or loved ones how you are doing, make sure they understand that the trading business has its ups and downs, and that it is best not to feel too excited during the ups nor too upset during the downs. Finally, perhaps the biggest source of stress is the expectations you place on yourself to do well. If you want to master the markets, you have to be ambitious. But, on the other hand, too much ambition can put unnecessary pressure on you. It’s better to take it easy. Don’t try to be perfect. Try to work hard, but at the same time, just do your best. When the heat is on, it’s hard to perform at your best. So why push yourself too hard? Why not take some of the pressure off? The less pressure you feel, the more free you will trade and the more profits you will make.
FINANCIAL PRESSURE
Most of us could use a little extra money these days, so there is always a little financial pressure to trade profitably. But financial strain can adversely impact your ability to trade with a calm, relaxed, focused mindset. If possible, it is useful to relieve some of the financial strain. A straightforward way to lessen financial pressure is to reduce the size of your trades. The less money you risk on any single trade, the less stress you will feel. Thinking in terms of probabilities can also relieve financial pressure. That is, if you remind yourself that any single trade is just one trade across a series of trades, and that the profits across a series of trades are all that matter, you will feel more relaxed.
Thank you for a good post!
A little long but useful seminar. Be mechanical so that you take out the win or loose attitude that can cause fear and the resulting loss of objectivity.
Of course, the question is then, how does one learn to become disciplined, in an environment and society that encourages a total disregard for disciplined saving and investing in oneself (which regular saving is) and instead encourages instant gratification.
And thus I argue that the statistics in trading, i.e. that 95-98% are unsuccessful is the very same statistic for people who retire with little or no money to live comfortably, for people who win lotto only to end up worse off, for business start ups that fail, for…..and the list goes on.
The key to success in the markets has really a lot less to do with the markets than most are willing to accept when you get to the bottom of it, and more to do with your ability to break away from the mold that is built for us from the moment we are born, and the way of thinking and belief systems that we are ‘expected’ to adhere to.